chapter 10

Question 1

terminal or horizon value

Answer 1

VCF/r-g

Question 2

PV value

Answer 2

VCF/(1+r)

Question 3

implied return

Answer 3

1. % owner x soalan
2. FV = PV(1 + r)
3. cari value r = implied return

Question 4

investors want a 40% rate of return on their investment, calculate the ventures’ PV

Answer 4

1. cari PV
2. PV for perpetuty = c/r
3. PV (using value of no.2)

Question 5

ownership percentage

Answer 5

investment amount/post money valuation

Question 6

post money valuation

Answer 6

pre money valuation + investment amount

Question 7

equity valuation cash flow

Answer 7

net income + depreciation - NWC - capital expenditure

Question 8

NWC

Answer 8

ΔCA - ΔCL (year 1 - year 2)

Question 9

capital expenditure

Answer 9

fixed assets 1 - fixed assets 2

Question 10

required cash

Answer 10

% x net sales

Question 11

surplus cash

Answer 11

cash 1 - required cash

Question 12

increase NWC (ada surplus cash)

Answer 12

(CA² - surplus cash) - CA¹ - (CL² - CL¹)